Company formation in Estonia
Are you considering an opportunity to run a business in Europe and looking for a suitable jurisdiction to register a European company?
It is very easy to open a company in Estonia — the choice of Estonia as a place to establish your entrprise is obvious, because only in our country there is no corporate income tax on retained earnings.
Setting up a company in Estonia can be done quickly and simply within 1 week – registration of an Estonian company can be done in person or remotely on the basis of a power of attorney or using e-Residency.
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If you have set up your mind on creating a company in Europe then above most, you should consider the option of opening your establishment on the territory of Estonia. For many years in Estonia an undivided attention was concentrated on the development of a convenient and high-tech business environment to attract foreign investment and non-resident entrepreneurs. As a result, Estonia has become a hub for many European IT-companies and innovative startups, such as blockchain companies and crypto exchanges, WEB 3.0 projects and DAOs, NFT-marketplaces, as well as fintech, crowdfunding, and DeFi platforms.
For many years in a row, Estonia is a leading country (1st place) in the International Tax Competitiveness Index rankings and on a permanent basis is taking top positions (18th place) in the Ease of Doing Business Index rankings. Establishing of a company in Estonia is going to undoubtedly become an effective tool for the effective start of your business-project and it’s introduction to international markets, so as assisting to diversify risks and to lower administrative load and tax load of the already existing enterprise. The main advantages of Estonian jurisdiction compared to other European jurisdictions are as follows:
- The tax rate on retained earnings is 0%
Enterprise profits are not subject to corporate or income tax until they are distributed to the founders – all profits generated by the enterprise can be used in full for business development or reinvested to generate additional income.
- The minimum amount of the share capital is 0.01 euros
When registering a company, the founders may form the share capital of any size, and if the amount of the contributed ownership capital does not exceed 50,000 euros, the Commercial Register does not require any documentary proof of payment of funds into the charter fund of the company (i.e. confirmation from the bank or the payment system).
- Full integration into the e-state of Estonia
Ability to use the electronic services of Estonian state institutions (Commercial Register, Tax and Customs Board, etc.) and remote management of your company’s affairs (submitting annual reports, making changes to the company, etc.).
This is far from complete list of the advantages of choosing Estonia as the place to incorporate your company. Thus, locating your business or start-up in the jurisdiction of the Republic of Estonia will stand out favourably from other alternatives and will help bring your business project into the legal framework of the European Union as soon as possible.
IT IS VERY EASY TO SET UP A COMPANY IN ESTONIA
For the past 20 years, the government of the Republic of Estonia has been actively pursuing policies aimed at attracting foreign entrepreneurs and investors to the country. Moreover, in 2014, Estonia launched the e-Residency program, allowing foreigners to fully access the services of the Estonian digital government, including registering companies online and remotely managing their business projects from anywhere in the world — as a consequence, more than 25,000 Estonian enterprises have been established by e-Residents to this day.
The procedure for setting up a company in Estonia is entirely free of bureaucracy, and is also incredibly simple and transparent – anyone interested can establish a company in Estonia in just a few days. Foreigners who are interested in opening a company in Estonia can employ the following methods to register their enterprise:
- Register a company online with e-Residency | 1 working day, Price from 365€
In order to set up a company in the specialised online environment of the Commercial Register, all active persons of the legal person (members and general managers) will require an e-Residency card.
- Company incorporation in person | 1-5 working days, Price from 550€
The procedure requires a personal visit to the notary’s office in Tallinn. Our lawyers will hold a preliminary consultation with you and will provide you with legal support throughout the entire process.
- Open a company remotely by power of attorney | 5-10 working days, Price from 750€
Create a company remotely without personal presence, you should issue a notarised power of attorney in the name of the lawyers of our agency, and we will carry out the procedure for establishing a company on your behalf.
Our specialists will hold a preliminary consultation with you and offer you the best incorporate an undertaking, as well as prepare all the necessary constituent documentation and will provide you with support throughout the entire process of establishing an undertaking.
WHY YOU SHOULD TURN TO US?
Our team of consultants, lawyers and accountants has been specialising in commercial law and foreign business support in Estonia for over 10 years. The experience and knowledge we have gained over the years enable us to offer our clients only the highest quality service and to find solutions for the most complex and unusual situations.
The main reasons to contact us for company registration in Estonia:
- Reliable service provider
We are a licensed company registrar in Estonia and hold the state license of provider of trust and corporate services No. FIU000144, issued by the Financial Intelligence Unit (FIU).
- Experience of many years and qualified specialists
Our team consists of experienced consultants and only graduate lawyers and accountants. More than 3,000 Estonian enterprises have been incorporated with our help in 10 years of activity.
- All services in a single place
We are a direct service provider and provide services using only our own resources, with no third parties involved in the process. All consultants, lawyers and accountants are employees of our agency.
- Quality guarantee
We guarantee impeccable quality and efficiency, as well as complete confidentiality and a responsible approach to each client.
- We value our clients
If you are our client, you can always count on our support, including free legal or accounting advice from our specialists if necessary.
We will be glad to become your trusted business partner for many years to come, and we will do everything we can to ensure that your undertaking’s entry into the market meets your expectations as closely as possible.
ADDITIONAL SERVICES FOR ESTONIAN COMPANIES
We offer a full range of services necessary for the successful opening of a company, start of commercial activities and further growth of your business. Among other things, we offer our clients the following corporate and support services:
- Accounting services
We offer comprehensive tax and accounting service for Estonian undertakings. Our specialists will provide you with qualified accounting support in current document management, as well as in preparing annual reports, filing tax returns, obtaining VAT number and EORI number, accounting for fixed assets, calculating salaries of employees, etc.
- Legal address and contact person
Every company formed in Estonia must have a legal address. For those enterprises that do not have Estonian residents among their founders and directors, we strongly recommend appointing a contact person who can receive correspondence sent to the organization and official notices from state institutions. We offer a legal address service in Tallinn as well as a virtual office and contact person service in Estonia for non-residents.
- Legal services
Our lawyers have many years of experience in the field of corporate and civil law. We will give you a thorough consultation on the subject of your interest, help you to analyse or correctly prepare the required legal documentation and, if necessary, represent you in negotiations with contractors or in court proceedings.
- Opening current accounts
We provide assistance in opening current accounts with banks and payment systems (EMI and PSP) in the territory of the European Union. We will find and offer you the best and most efficient payment solution based on your business model and the nature of your business activities.
We offer professional business consulting, accounting and legal support to business projects that are at the initial stage of development as well as to operating enterprises seeking to restructure their internal processes and optimise their economic performance.
CONTACT US
Are you interested in registering a business in Estonia? For individual price quotations on setting up a company in Estonia, as well as its further support and service, feel free to contact our specialists and consultants! We will analyze your business model together with you and offer you the most effective Estonian company establishment solution in order to bring your business project to the single market of the European Union as soon as possible. Corporate services are our specialty!.
Company in Estonia | FAQ
Below you will find a list of the most frequently asked questions that our consultants encounter in the course of their work. Perhaps you will find this material interesting to read.
- What is the best legal form for opening a company in Estonia?
The most common and effective form for establishing a legal entity in Estonia is the Private Limited Company, or PLC for short (OÜ or osaühing in Estonian). The minimum number of participants is 1 founder (shareholder) and 1 member of the Management Board (director or general manager). The liability of the partners in a PLC is limited to their contributions to the share capital.
- How do I choose a name for my future company?
The name of a company established in Estonia must clearly differ from the names of previously established entities, both in spelling and phonetically. You can check the availability of the desired legal name on the website of the Commercial Register.
- Do I have to pay the share capital for an Estonian company?
Yes, the share capital of an Estonian company has to be formed at registration — the minimum amount of the share capital is 0.01 euros (1 euro cent). However, the founders are not required to submit any documents to the Commercial Register confirming the payment of the share capital, if the amount to be registered does not exceed 50,000 euros.
- How can I pay the share capital?
The share capital of an Estonian company can be paid in cash into the corporate account, by a non-cash contribution by transferring the assets of shareholders to the undertaking’s balance (phones, computers, property rights, etc.) or by an equity issuance, whereby the retained earnings for any reporting period are transferred to the share capital.
- Can foreigners be owners and general managers of an Estonian firm?
Yes, they can; in general, a resident of any country can set up a company in Estonia. Foreigners can become founders and general managers of legal entities registered in Estonia without any restrictions.
- Can a foreign company be a founder of an Estonian firm?
Yes, it can; a legal person registered in a foreign country (parent company) can become a founder of an Estonian entity (subsidiary company). In order to incorporate such a structure, we will first need recent (no more than 3 months old) official corporate documents of the foreign corporate structure, which must show the registration details of the legal entity as well as it’s general managers, owners and beneficiaries.
- Can one person be the owner and the general manager of a company at the same time?
Yes, he/she can; one person can be both founder (shareholder) and general manager (member of the Management Board) of a company in Estonia.
- How do I choose the right field of activity for my company?
When registering a company, only one intended field of activity is indicated, which is purely informative and does not constitute a binding circumstance for the enterprise. The field of activity should be selected from the EMTAK classifier, which is an adapted version of the international harmonised NACE classifier. Our consultants can help you find and choose the field of activity that best suits your business model.
- Does the choice of the field of activity impose any restrictions on the business?
Estonian companies have the full right to do business and conduct their activities freely in all areas that are not prohibited or restricted by the relevant legislative enactments. It is common practice that the field of activity is not specified in the articles of association, so changing or extending the field of activity does not entail any difficulties or unnecessary bureaucracy. A legal person can be active in several fields of activity at the same time.
- Can an Estonia incorporated organisations have current accounts in foreign banks?
Yes, it can; you are free to open and use current accounts with banks and EMI/PSP payment systems outside Estonia. The most popular payment services providing the possibility of opening a current IBAN account are Paysera, Wise and Revolut.
- I need corporate documents to open a current account, where can I get them?
An electronic version of the corporate documents can be found on the website of the Commercial Register. If you need paper versions of the register card, articles of association, memorandum of association and other corporate documents, certified and apostilled, you can order them through us.
- Is it required to pay salary to the general manager on a compulsory basis?
No, it is not required; the general manager has the right to perform his/her duties for free and not to receive any remuneration for his/her activities.
- Is it required to keep accounting records and file financial statements?
Yes, it is necessary; all undertakings registered in Estonia are obliged to keep accounting records, register all transactions and also keep all primary accounting documents. Also, all legal pesons are obliged to submit annual financial statements to the Commercial Register within 6 months of the end of the business year (by default, no later than 30 June).
- Is it necessary to file financial statements if a enterprise did not conduct business?
Yes, it is necessary; even the companies that did not conduct any business activities during the financial year must submit an annual report (so-called zero balance) to the Commercial Register.
- Is there a corporate income tax in Estonia?
No, there is no corporate income tax for enterprises in Estonia. Company profits are not taxed in any way – you are free to reinvest your earnings in the development of the enterprise, the purchase of fixed assets, securities and so on. The obligation to pay tax at the rate of 20/80, i. e. 25% arises only in the case of actual distribution of profits and payment of dividends to the founders.
- Does the company have to register as a VAT payer?
The undertaking must register as a VAT payer as soon as the enterprise’s turnover subject to VAT within one business year exceeds 40,000 euros. In other cases, registration as a VAT payer is voluntary.
- Is it necessary to pay taxes when making payments to foreign workers?
No, it is not necessary; if the enterprise pays salaries or other benefits to it’s employees or freelancers who are not Estonian tax residents, the undertaking has no tax liability. In such a case, the obligation to declare income and pay taxes arises for the recipients of the payments according to the rules and rates of the jurisdiction of their tax residence.
- How do I find out my company’s tax number TIN?
Estonian enterprises do not have any separate tax identification number TIN. A registration number is used to identify the legal entity to the tax authorities and other state institutions.
- How long does it take to register a company?
An application for the registration of a company will be processed within 1 working day if it was submitted online on the website of the Commercial Register (company formation through e-Residency) or within 5 working days if the application was submitted through a notary (establishment of a company in person or by a notarised power of attorney).
- How can I register a company online?
In order to be able to open a company online on the Internet portal of the Commercial Register, you must have an e-Resident card, which is used to verify your identity and is required for signing the legal person registration application with a digital signature
- What is e-Residency?
e-Residency or e-Resident card is a smart card with a microchip that is issued by Estonia to non-residents and gives them digital signature capabilities. The e-Residency can be used to sign documents, identify an individual on the Internet and use electronic services of the Estonian e-state (including the establishment of legal persons).
- How can I apply for e-Residency?
You can fill out the e-Residency application form in the online environment of the Estonian Police and Border Guard Board. You can pick up your e-Residency starter kit at the following locations around the world.
- Do I need to hire a local general manager or employees for my Estonian company?
No, you do not have such an obligation.
- How many shareholders and general managers can a company have?
An Estonian company must have at least one member of the management board (general manager) and one founder (shareholder). The maximum number of founders and general managers is not established by law.
- What requirements do I have to fulfil in order to set up a company in Estonia?
In order to open a company in Estonia, an application must be submitted to the Commercial Register, which shall include: the corporate name, the personal details of the company general managers, owners and beneficiaries, the company phone number and e-mail address, the legal address, the details of a contact person, the field of activity with EMTAK or NACE code, and the text of the articles of association of the company.
- Why is Estonia the most attractive jurisdiction for starting a business in Europe?
The main and most significant advantage of Estonia over all other countries of the European Union is the absence of corporate tax on retained earnings. This means that all the funds earned and accumulated by the undertaking will not be subject to income tax until profits are distributed and dividends are paid to shareholders. Thus, Estonian enterprises are free to invest their earnings or make investments without having to think about paying corporate taxes.
- How are the activities of Estonian companies regulated?
The activities of legal persons on the territory of Estonia are regulated by the Commercial Code, which is available for review in English.
- I would like to establish a company in Europe. Is Estonia suitable for me?
Yes, absolutely. Estonia is geographically located in northern Europe and has been a full member of the European Union and the common customs area since 2004. If you wish to start a European company and expand your business into the EU, then choosing Estonia as your main jurisdiction will be the best solution for you.
- How easy is it to start a company in Estonia in comparison with other European jurisdictions?
Estonia traditionally holds a leading position among European countries on the Ease of Doing Business Index, and this is no accident. A developed electronic state, the absence of excessive bureaucracy and attractive conditions for foreign investment will make the process of establishing an enterprise on the territory of Estonia as fast and convenient as possible for non-residents.
PRICE LIST
Below are the prices for the service of setting up and opening a company in Estonia, as well as additional corporate and legal services.- Type of servicesPrice
- Opening a company online with e-Residency365 €
- Setting up a company online using e-Residency + legal address and contact person615 €
- Company registration in person by visit550 €
- Company formation in person at a notary’s office + legal address and contact person750 €
- Establishing a company remotely by power of attorney750 €
- Incorporating a company remotely by proxy + legal address and contact person1000 €
- Contact person in Estonia (price for 1 year)150 €
- Legal address in Tallinn (price for 1 year)150 €
- Opening of corporate IBAN bank or payment account (price from)300 €
- Legal or accounting advice (price for 1 hour)75€
The cost of formation a company, regardless of the method, includes payment of all notary fees and state fees, as well as the service of a legal address and a contact person for one year. The above prices do not include a possible VAT of 20%.
